This will in turn bump up unemployment substantially, erasing
much of the work of outgoing prime minister David Cameron and his
governments have done to lower unemployment in
the so-called "Jobs Miracle."

Here is the key extract from the analysts (emphasis ours):

"On the back of our forecast for GDP growth falling to 1.0% in
2016 and -1.0% in 2017, we can expect the unemployment
rate to jump up to 6.5% by the end of 2017. This
expected rise in unemployment is likely to squeeze nominal
household incomes as wage growth takes a hit. This may occur with
a lag, as has been evident by the puzzling sticky response of
wages to falls in unemployment in the UK over the past few
years."

As it stands, the
UK's unemployment rate is at just 5%, according to the ONS, a
record low since the current statistical period began. That 5%
represents roughly 1.67 million people out of the 33.26 million
people in the UK classed as being available to work. Based on a
rough calculation, an increase in unemployment from 5% to 6.5%
would leave 491,000 people currently in work out of a job.

In their note, reassuringly titled "Mayday! Mayday!" Credit
Suisse's Boussie et al. also note that they expect rising
unemployment to trigger a slackening of the "robust" consumer
sector, which in turn could cause even more serious problems for
the economy.

The logic is simple — when people are worried about the state of
their finances, they stop spending, and when people stop
spending, that can signal serious problems on a macroeconomic
scale. Consumers are the great rescuers of the economy, but if
they stop spending, things could go very bad, very quickly.

Here is more from Credit Suisse (emphasis ours):

"Given our forecast of a recession in the UK economy in the next
few quarters, we expect the unemployment rate to rise. Figure 14
shows the historical relationship between GDP growth in the UK
and changes in the unemployment rate. As the chart shows, rises
in GDP growth are often accompanied by falls in the unemployment
rate. We ran a regression estimating the sensitivity of the
unemployment rate to current and lagged annual GDP growth in the
UK. Figure 16 plots the actual and fitted changes in the
unemployment rate based on our regression. We can see a lagged
response in the labour market to slowing growth so far – while
growth has slowed to levels consistent with a stabilization/ rise
in the unemployment rate – the unemployment rate continues to
fall."

And here are figures 14 and 16, as mentioned above:

Credit
Suisse

Credit
Suisse

Credit Suisse's research comes just a few hours after another
report from the bank's Global Equity Strategy team, which
suggested that even before the referendum result, several data
points were pointing to a coming recession for the UK. "We
fear that, ahead of the referendum, two of the best lead
indicators for UK growth – service PMI new orders and vacancy
growth – were already consistent with a mild recession,"
Garthwaite and his team argued.